Edinburg, TX · Member since 2013 · 8 posts · 0 votes
I notice that the banks are selling a lot of their property in auction with quit claim deed. I understand what quit claim is, but I'm not sure if I understand what the means for the title. For example, if I buy the property and fix it up and resell will my end buyer getting a loan be able to purchase it? Or will the quit claim deed from the bank put a cloud on the title? I am from Texas and I'm curious if title insurance will be an option and if banks will lend on this. Any title companies in Texas that insure quit claim would be appreciated. Thanks.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
13y
I though Texas didn't accept quit claim deeds as a legitimate forum of transfer. Have you spoken with a title company about this? This is not common practice here for banks. They usually give a special warranty deed, not quit claim. The only time I've seen quit claims being used is for bulk REO junk where there really are title issues. You as the buyer have to clean those up in order to be able to pass on a clear title to your buyer.
Orlando, FL · Member since 2013 · 165 posts · 62 votes
13y
When you buy property from a bank, get title insurance when you buy. The title insurance company will not write the title insurance unless the title is clear. If it is good enough for the title insurance company, it is good enough for me.
The only difference between a quit claim deed and a general warranty deed is the promises made by the seller (grantor). The title insurance company backs up those promises. Either deed transfers ownership.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Jay, I hate to hear that some bank is even thinking of that it should be a Special Warranty Deed, not a Quit Claim, the QCD only gives that interest they MAY have in the property, the SWD conveys interest and excludes whatever they want to exclude, like any matters during thier ownership interests. They are getting lazy.
That said, things are different in Texas, if the title companies accept that as Ron mentioned, then so be it as it is the title coverage that will allow you to sell with warranty giving a General Warranty Deed. :)
Edinburg, TX · Member since 2013 · 8 posts · 0 votes
13y
Ron, that is my question because I don't believe there are title companies that will insure a quit claim deed in Texas. I've read that it may cloud up title for 25 years. I just would like to see what investors in Texas think of Quit Claim deeds in Texas. Are they familiar with title companies that will insure these? It seems like many investors are buying these properties with quit claim deeds from the bank. I wonder what their exit strategy is? Because if you cannot get title insurance you cannot resell to end buyer getting bank financing, correct? So if I buy a bank property with quit claim deed should my strategy be to confirm that title is clear and then hold the property as a rental forever, realizing I never may be able to sell it? Any help from investors in Texas would be greatly appreciated. Thanks.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
I don't know Texas specifically, but the type of deed transfer generally won't have a bearing on getting title insurance. Title insurance companies look at the Past history of the title. If there was a problem in the past, they won't insure no matter what type of title transfer you're getting. Same thing with a foreclosure auction purchase, here we get a Certificate of Title which has no warranties whatsoever. If there are no hanging liens/title issues, then no worries.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
13y
I though Texas didn't accept quit claim deeds as a legitimate forum of transfer. Have you spoken with a title company about this? This is not common practice here for banks. They usually give a special warranty deed, not quit claim. The only time I've seen quit claims being used is for bulk REO junk where there really are title issues. You as the buyer have to clean those up in order to be able to pass on a clear title to your buyer.
Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
13y
The only time I've seen banks selling properties on a quit claim is through Auction.com with occupied properties that they just got back through the foreclosure process. They make it pretty clear that no title insurance is available on the purchase. It'll definitely make it harder to get title insurance on the next sale but I'd imagine for a price you can find a title company that would go back further in the title to insure it as long as there really aren't any major title issues.